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The Big Four In Tech Are Buying Into The Renewable Boom

Haley Zaremba

 “By the end of the coming decade we will be on one of two paths. One is the path of surrender, where we have sleep walked past the point of no return, jeopardizing the health and safety of everyone on this planet,” the Secretary General of the United Nations’ Climate Change Conference COP25 told his audience last December. “Do we really want to be remembered as the generation that buried its head in the sand, that fiddled while the planet burned? The other option is the path of hope.”

While the United Nations and expert organizations such as the Intergovernmental Panel on Climate Change (IPCC) have done the professional and diplomatic version of begging, pleading, and crying for more serious and urgent development of renewable energy, the private sector has been slow to respond. As Oilprice reported in November, the “number one bottleneck for clean energy tech” is funding. 

Summing up the issue, an MIT Technology Review article titled “Why Bad Things Happen to Clean-Energy Startups” reported that “By now [bankruptcy] is a familiar phenomenon in clean energy. Companies must make a massive up-front investment to develop new hardware and scale up manufacturing, all while chasing moving price and performance targets as incumbent technologies improve. Faced with such challenges, vanishingly few succeed.” 

While it’s true that overall, global investment in renewables has been on an upward trend, the growth rate has been volatile, and the United States, the world’s second-largest energy consumer, has made a lackluster effort to curb emissions, to put it lightly. While there are lots of promising energy alternatives currently under development, they face major barriers to being scaled up. “The question is where such investments will come from,” wrote MIT. “The Trump administration has taken steps to dismantle the federal funding program for clean-energy startups, and venture capital investments for such technologies have dropped nearly 30 percent since 2011, from $7.5 billion to $5.2 billion, according to a recent report from the Brookings Institution.”

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That article, happily, is now a bit dated. While the outlook for corporate interest in weaning the world off fossil fuel was pretty bleak back in 2017 when the MIT article was published, it looks like the energy tide may finally be turning for the private sector. This week PV Magazine reported that “with businesses more eager than ever to make bold clean energy promises, the global market for corporate renewable energy power purchase agreements continues to surge.” The article continues, citing findings from Bloomberg New Energy Finance (BNEF), “last year, corporations contracted an unprecedented volume of renewable energy projects, up more than 40% from the previous year’s record.” 

BNEF’s newly released 1H 2020 Corporate Energy Market Outlook found that over 100 corporations from 23 different nations signed clean energy contracts totaling approximately 19.5 GW of clean energy projects in the last year. “This was up from 13.6 GW in 2018, and more than triple the activity seen in 2017,” says PV Magazine. “The analysts estimate the demand for corporate PPAs amounted to between $20 billion and $30 billion in investment and was equivalent to more than 10% of all the renewable energy capacity added last year.”

Lead sustainability analyst at BNEF Jonas Rooze told PV, “Corporations have purchased over 50 GW of clean energy since 2008. That is bigger than the power generation fleets of markets like Vietnam and Poland. These buyers are reshaping power markets and the business models of energy companies around the world.” Chief among these corporations is the tech sector, which is leading the way for a more emissions-conscious business model going forward. “Google signed contracts to purchase over 2.7 GW of clean energy globally, followed by Facebook (1.1 GW), Amazon (0.9 GW) and Microsoft (0.8 GW).” Let’s just hope that the rest of the world is very quick to follow in these footsteps. 

By Haley Zaremba for Oilprice.com

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